A disgraced investment advisor who sold her practice to Wealth Enhancement Group before becoming the subject of an extensive fraud investigation now has 10 years in prison to look forward to.
In March this year, Darrah separately
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Like the SEC and WEG civil suits, the federal criminal case against Darrah accused her of using her position as a financial advisor to siphon off the assets of many elderly residents in and around the unincorporated community of Orcutt, California. The U.S. district attorney said she gained the trust of her victims by "often convincing them she would take care of them in their older years like a daughter."
Gaining positions of trust
Her theft of $2.25 million from clients took place from November 2016 to July 2023, according to the criminal complaint. She carried it out by persuading her victims to sign documents making her their trustee or a signatory on their bank accounts or giving her power of attorney over their brokerage accounts. The money she moved out would sometimes go straight to her own bank, according to the complaint.
She used her ill-gotten gains to buy things like luxury vehicles and support her other business ventures.
After the fraud was discovered, "Some victims were left in desperate circumstances, without the money to pay for end-of-life care," according to the district attorney's office.
Edward Robinson, Darrah's lawyer, said he and client "accept the judge's sentence."
"We are hoping that Ms. Darrah can do her best to make restitution to the victims," he said.
Settlements with the SEC, WEG
Darrah has already been saddled with some heavy repayment obligations in her other cases stemming from the fraud. In December,
That same month,
But the release notes that a Minnesota-based investment advisor firm, which it refers to as "Business Victim 1," incurred roughly $5.4 million in losses after buying Darrah's former practice. A spokesperson for WEG declined to comment on the outcome in the criminal case.
"We have fully cooperated with law enforcement agencies in their review of this matter," the spokesperson said. "Wealth Enhancement holds our entire team to the highest professional and ethical standards and we do not tolerate anything less."
The size and scope of elder fraud
Fraud targeting
So-called "affinity fraud" — in which scammers perpetuate their schemes by establishing a personal connection with their victims — remains common. But even more prevalent is fraud carried out by scraping personal financial information off the internet.
It's not always the 'dark web'
Ron Zayas, the CEO of Incogni's Ironwall data protection service, said the personal data used in these scams isn't always the type of confidential information like Social Security numbers and credit card numbers that often have to be pulled from illicit sites on what is known as the "dark web." More often than not, it's phone numbers and addresses that can be retrieved for a small fee from legitimate people-search services and other online resources.
"Who are the most vulnerable people?" Zayas said. "Well, they're going to be people who are wealthy. They tend to be elderly. They tend to be people who may live alone, who may not have somebody else in their life. Maybe they're in nursing care, or in other situations like that. All of that information is information you can buy on the internet."
State lawmakers could help, Zayas said, by passing laws stipulating that residents have to opt in to having their data appear on people-search sites rather than opt out. And more important, he said, people need to become more guarded about giving out phone numbers, addresses and other bits of information often deemed innocuous — much as they already are with their Social Security and credit card numbers.
"People need to understand that that phone number tells me where you live, tells me who your family is, tells me all these pieces about you," he said.
